Gold posted a new all-time High on June 21, 2010, a week ago today, before falling off so as to close about $34 lower on the same day. It then rose last week and challenged the 78.6% retracement of its falloff on Friday and again this morning, but has been forcefully thrown back to about $1240 as of this writing.
Last Monday’s Candlestick bar pattern was clearly a “Bearish Engulfing Pattern.” Today’s Candlestick bar just misses being another Bearish Engulfing bar, but it is close enough that we pay attention to it as a bearish warning signal.
If the patterns hold true to form, last Monday’s all-time High was the top of a fifth and final upwave and marks a change of major trend from Up to Down. The corollary is that last Wednesday’s Low was the bottom of Wave 1 Down and that today’s High was the top of Wave 2 Up, which in turn means that Wave 3 Down is in progress and should lead to substantially lower prices over a long period of time.
William Kurtz
http://www.candelaabra.com
